Gold price prediction: Compression near $3,318 may spark breakout rally or drop
Gold remains rangebound near $3,318 as traders await breakout from triangle structure
Gold (XAUUSD) traded around $3,318 on Thursday, continuing to consolidate within a multi-month symmetrical triangle pattern, with price action compressing between rising support from March and resistance near $3,400–$3,420. The narrowing structure suggests that a breakout or breakdown could soon occur as price approaches the apex.
Highlights
- Gold price trades near $3,318 inside a triangle pattern, awaiting breakout as U.S. dollar firms
- June PPI flat and easing trade tensions weigh on gold’s safe-haven appeal
- Technicals remain bullish with EMAs rising; $3,400 breakout could target $3,550–$3,600
While the metal gave back modest gains in the latest session, technical conditions remain constructive as long as the $3,300–$3,308 support zone holds. Gold's retreat this week followed a modest rebound in the U.S. dollar, which gained strength as uncertainty around Federal Reserve leadership eased. President Trump denied reports that he considered removing Fed Chair Jerome Powell, though he renewed criticism of the Fed’s interest rate policy. This reassurance contributed to a stronger dollar, which in turn weighed on gold’s safe-haven demand.
Gold price dynamics (Source: TradingView)
Adding to the cautious tone, the June Producer Price Index (PPI) came in flat, indicating subdued inflation at the wholesale level. This tempered fears raised by the stronger CPI report earlier in the week and suggested that tariff pressures may not be feeding into broader inflation. On the geopolitical front, a softening in U.S.-China trade tensions and a new trade deal with Indonesia, along with tariff talks between the EU and the U.S., also reduced the demand for gold as a hedge against uncertainty.
Triangle breakout in focus as volume dries up
From a technical perspective, gold price remains well-supported above its major moving averages. The 20 EMA at $3,333, 50 EMA at $3,307, and 100 EMA at $3,208 are all trending higher, reinforcing bullish momentum. The On-Balance Volume (OBV) remains steady at 16.2M, suggesting that the recent consolidation is not driven by distribution but rather by reduced volatility ahead of a potential breakout.
Should gold price breach the $3,400 resistance zone with volume confirmation, a rally toward $3,550 and possibly $3,600 is likely. This move would represent a 7–8 percent upside from current levels. Conversely, a breakdown below $3,300 could send price toward the $3,208–$3,100 region. For now, traders are watching for resolution within the triangle, with volume and macro cues expected to drive the next leg.
In our earlier analysis, we highlighted the formation of a compression zone between $3,300 and $3,400. Gold price continues to respect that range while building support above its EMAs. As noted previously, the structure points to trend continuation unless invalidated by a breakdown below $3,300.
